Cloud service procurement specialists face a myriad of challenges when it comes to transitioning their organizations to the public cloud ecosystem. The process can be filled with conflicting information from numerous salespeople, convoluted contractual terms, and the overwhelming task of aligning stakeholder demands with available options. However, by adopting a proactive approach and leveraging expert insights, procurement specialists can navigate these complexities and maximize their understanding of what the public cloud truly has to offer.
One of the key strategies for procurement specialists is to carefully evaluate and question the sales pitches received from various providers. Salespeople often have their own motivations and may present conflicting information or exaggerated claims about the benefits of their particular solutions. By scrutinizing and challenging these pitches, specialists can gain a more accurate understanding of a vendor’s capabilities and limitations.
Another crucial aspect is dealing with complex contractual terms. The public cloud landscape is rife with intricate legal agreements that can be challenging to decipher. Procurement specialists must invest time in thoroughly reviewing and negotiating these contracts to ensure that their organization’s interests are fully protected. Seeking the assistance of legal experts who specialize in cloud computing contracts can be immensely helpful in this regard.
Furthermore, aligning stakeholder expectations is paramount when moving to the public cloud.
Here are five tactics cloud providers employ to mislead, along with effective countermeasures to combat their deceptive practices.
1- Hidden Expenses
Cloud vendors might omit certain charges from their initial estimates, or shroud prices within peculiar custom pricing scales. They may emphasize less expensive startup fees, all the while glossing over the more expensive maintenance costs incurred in the long run.
Countermeasures
In response to the hidden expenses that cloud service providers may impose, there are strategic measures that can be undertaken to mitigate those costs. It is imperative to foresee potential inefficiencies during the transition and incorporate these into your operational cost predictions. Establishing Statements of Work (SOWs) that outline the pricing based on tangible deliverables can help control budget allocations, keeping time and materials pricing only for occasional use. Simultaneously, it is beneficial to tag and monitor all ongoing resources within the cloud infrastructure to maintain the visibility of the utilized services. To keep track of your cloud expenditure, regular business show-back reports should be produced covering all cloud-based transactions. Finally, ensuring that all possible charges— data, broadband, and any ingress/egress traffic—are factored into the overall cost will assist in maintaining a robust and realistic budget.
- Incorporate potential inefficiencies into your operational cost projections during the transition phase.
- Establish Statements of Work featuring pricing based on tangible deliverables, restricting time and materials pricing to occasional use.
- Effectively tag and keep a close watch on all your ongoing resources in the cloud.
- Generate regularly updated business show-back reports for all cloud-based transactions.
- Take into account all potential costs, including data, broadband, and any inbound/outbound traffic charges.
2- Misdirected Promises
Cloud service providers might follow rigid pricing structures while blurring the perils of over-commitment. They may also enforce default enterprise agreement terms and conditions, causing the client to bear all potential risks.
Countermeasures
As a countermeasure to misdirected promises made by cloud service providers, it’s imperative to clearly understand the nuances of the various pricing models and entitlements on offer. You should demand business outcome Experience Level Agreements (XLAs) that are directly tied to your organization’s profit and loss status, which will ensure you’re getting your money’s worth. Assigning resources to manage and establish automation in your continuous cost optimization processes is recommended. This will keep your budget in check and ensure maximum resource utility. Lastly, don’t hesitate to ask for customized pricing solutions. These should incorporate options such as Bring Your Own License (BYOL), Pay-as-you-go (PaYG), and other commitment models that align with your business’s particular needs and resources.
- Gain comprehensive knowledge about all the different models and entitlements.
- Request for business outcome XLAs that are directly associated with the profit and loss statement.
- Allocate resources to regulate and automate continual cost optimization.
- Request for custom pricing solutions that utilize Bring Your Own License (BYOL), Pay-as-you-go (PaYG), and commitment models.
3- Illusive Ease of Use
Cloud service providers may imply that their cloud solutions are “straightforward to use and control,” neglecting to mention the time and cost involved in reskilling and reorganizing for cloud adaptation, or they may present unsupported agility metrics.
Countermeasures
To counter the illusive promises of ease of use by cloud providers, businesses can adopt a number of strategic measures. Applications should be classified based on the risk they pose in causing business downtime, which minimizes disruptions. Also, it’s important to establish a balance between the risk of vendor lock-in and the innovation gained from vendor-specific extensions. To ensure that agility metrics are not just unsubstantiated buzzwords, it’s critical to negotiate KPIs effectively. This encourages the optimization of agility metrics and guarantees your business maintains pace and efficiency in its cloud operations.
- Sort applications according to the risk they pose to business downtime.
- Find a balance between vendor lock-in and the value derived from vendor-specific advancements.
- Negotiate key performance indicators (KPIs) to inspire the optimization of agility metrics.
4- Overstated Interoperability
Cloud providers might highlight their unique container management/security measures, express a deficiency of compatibility with native tools or expose limitations in enterprise application infrastructure.
Countermeasures
To counter the overstated claims of interoperability by cloud providers, businesses must adopt a critical approach. Proposed speed metrics need to account for the adaptation of operational processes and skills, and these should be questioned if they don’t. Verifying claimed productivity gains through customer references that closely match your business profile can help substantiate the real potential for improvement. Understanding the difference between application migration and modernization is crucial to effective planning. Lastly, the ongoing costs of Business Process Improvement (BPI) should be built into the SaaS adoption cost to ensure accurate budgeting.
- Challenge vendor-proposed velocity metrics that overlook the time and cost required to modify operational methods and skills.
- Verify the claimed productivity improvements with customer references that align closely with your profile.
- Draw clear distinctions between application migration projects and application modernization projects.
- Incorporate the continuous costs of Business Process Improvement (BPI) into your Software as a Service (SaaS) adoption cost.
5- Indirect Costs
Cloud service providers might factor in sunk costs, unexpectedly propose managed service provider/cloud service provider (MSP/CSP) aid for handling tasks, or jointly sell with an implementation partner that aligns more with their preferences rather than the client’s needs.
Countermeasures
When dealing with the indirect costs that cloud service providers might impose, one should consider several strategies for effective management. Including the sunk costs in the Total Cost of Ownership (TCO) estimates allows for a more accurate picture of financial implications. It is necessary to plan ahead for the costs associated with organizational transformation—to avoid future financial shock. Maintaining the ability to choose your own implementation provider can ensure your company’s specific needs are prioritized over the preferences of the cloud provider. Lastly, clearly defining the divisions of responsibility and exit procedures at the onset can help manage possible disputes or misunderstandings later.
- Incorporate sunk costs in Total Cost of Ownership (TCO) estimates.
- Prepare for organizational transformation costs from the outset.
- Insist on the freedom to choose your own implementation provider.
- Explicitly outline responsibilities and exit procedures.